The present invention relates to methods for facilitating capital investment decisions and transactions concerning development, expansion, consolidation, location, relocation, merger, acquisition, and/or disposition of business operations and/or facilities using computer interface inquiries. The inventive method allows a user to select and compare business locations based on demographic and/or economic criteria and to optionally determine financial factors associated with operating a business in selected locations. In particular, the invention is directed to a method for deciding whether, where, and to what extent to invest capital for the development, expansion, consolidation, location, or relocation of a business, business operation, or business facility. For example, the invention provides a method for selecting locations for expansion or relocation of a business operation or business facility.
Within the business community, the term “site selection” in general is used to refer to the process for selecting a business location (i.e., the jurisdiction in which the business is to be located) and/or a site for the business (i.e., the parcel of land itself, with or without buildings or other improvements). Herein, the term “capital investment transaction” or “cap-x transaction” will be used to generally refer to transactions stemming from capital investment decisions concerning development, expansion, consolidation, location, relocation, merger, acquisition, and/or disposition of business operations and/or facilities. Choosing a location and site for capital investment in a business facility or operation, so-called “cap-x” projects, can be an arduous task. Small to mid-size companies may face this problem only rarely, perhaps once during the life of the company. For such companies, capital investment decisions involving location and site selection decisions can be crucial to the future of the company. However, due to the rarity of the situation, the personnel involved in the candidate location and site selection process often have little or no experience in making such decisions. On the other hand, larger companies may face cap-x projects often, perhaps even once a year. Yet, whatever the size of the company, site selection projects involve the analysis of enormous amounts of data requiring a great deal of expense and the allocation or reallocation of valuable resources, particularly in-house personnel resources.
In addition to the companies themselves, Economic Development Agencies, Economic Development Authorities, Chambers of Commerce, and similar commerce promotion organizations (collectively, EDA's), and related service providers also get involved in these cap-x projects. While, as noted above, companies may face such projects infrequently, EDA's may get involved in many such projects during the course of a year. Each EDA may face stiff competition to attract or retain such projects and will need to emphasize the advantages of its location over other locations.
The process of deciding where, for example, to expand or relocate a business, or deciding which of several business locations to close down, involves the gathering and analysis of data on a wide variety of factors. These factors understandably include physical aspects of the prospective locations, for example, their proximity to municipalities, relevant markets, and transportation routes such as highways, rivers, railways, and airports. Additionally, there are important economic and demographic factors that should also be considered, e.g., local and regional taxes, local and regional regulations, the cost of utilities, and the size, education and skill of the local workforce.
Further, in selecting locations, the decision maker should consider not only the present day conditions, but also how these conditions might change in the foreseeable future. For example, while a particular location may be a superior candidate for relocation/expansion based on the estimated cost for start-up and first year operations, projected increases in costs for taxes and/or utilities could make the candidate inferior in comparison to others. Alternatively, projected demographic data night indicate that the location site will be unable to handle planned future work force expansion.
During the course of such cap-x projects, selection criteria may change dramatically. In other words, the data, project specifications, decision choices, decision criteria, and business projections that go into a capital investment decision-making process are all very dynamic. Any one or more of these may change, and they may change once or frequently. Under traditional methods, a report or other work product of internal project teams, outside consultants, or other hired professionals is rather rigid, static, expensive (in terms of human resource allocation, time, and money), and, thus, is not readily adaptable to changes. The traditional methods' work product thus becomes “stale” very quickly once a change occurs. Redoing that work product to update, adapt, or otherwise modify the data is an expensive process, one that might need to be repeated over and over again. For example, initially a company might seek to have a location which has close access to a major highway. But, then, during the course of the project, the business model changes and the new focus of the search might be to have a location which is as close as possible to an airport. As a result, the project team may need to completely shift direction and discard weeks or even months of research and analysis.
Thus, the process of investigating and comparing business locations is a complicated one. In light of the large amount of data to be collected and evaluated, the need to consider changes in data, and the need to take future operations into consideration, the process is often cumbersome, confusing and expensive. Further, in the early stages of a project, its viability is often uncertain. For example, after the expenditure of much up-front human resource allocation, time and money, a project may get placed on hold for long periods or even be canceled. As a result, a company may be reluctant to invest significant resources during the early stages of the projects. However, because of the complexity of the project, it may not be feasible to perform sufficient preliminary investigations without allocating substantial resources.
Also, the data available on different locations may come in many different forms. Under traditional methods, performing apples-to-apples comparisons of demographic and economic data, other locational attributes, and financial results from various decision choices can be difficult if not impossible.
In the past, a company faced with such a capital investment project could set up an internal project team to perform the data collection, analysis, and investigation to arrive at a list of candidate locations and available existing business operations, facilities, or other sites. Alternatively or additionally, a company might hire consultants to assist with these tasks. In either case, the scope of the information to be collected and analyzed is enormous and there are numerous choices to be a made in performing the analysis. With outside consultants, associated costs may become quite high since such projects can easily continue for months or even years. On the other hand, due to the enormity of the task, internal project teams can often be quickly and easily overwhelmed. The resultant disruptions, discontinuity, and/or productivity loss from reallocating valuable internal personnel resources can be quite significant.